We’re all concerned about the environment, which is why the UK Government introduced the Energy Act 2011 and the Climate Change Act 2008, which aim to reduce carbon emissions by 80% between 1990 and 2050.
The UK has some of the oldest buildings in the world, and in 2014, buildings were responsible for about 34% of all UK greenhouse gas emissions.
So there is now a new Minimum Energy Efficiency Standard (MEES) that covers Energy Performance Certificates (EPCs) for residential and commercial property. The aim is to promote the refurbishment of buildings that are currently the least energy efficient.
If you breach the MEES regulations, you could be fined between £5,000 and £150,000.
Key dates to remember
- 1 April 2018 The MEES regulations already cover new leases, renewals and extensions
- 1 April 2020 The regulations will apply to existing residential tenancies
- 1 April 2023 The regulations will apply to existing commercial leases
What this means to you
If your property currently has an EPC rating of F or G, you will need to improve the rating to at least an E before you can rent it out. Also, informed tenants may use a sub-standard rating as a bargaining tool during a rent review. The rules don’t cover properties for sale, but you need to know it may be more difficult to obtain a mortgage.
If your current EPC is due to expire soon, be aware your building might be down-rated.
If you don’t have a valid EPC at all, you could be fined between £500 and £5,000.
There is a chance the minimum standard will rise from E, so it’s best to consider this when planning improvements.
For residential properties, you might be able to get funding to do the required work from the Green Deal scheme or by applying for an improvement grant from your local authority.
Note that there’s no funding for commercial properties, so you will need to check the lease to see who’s obliged to carry out the work – the landlord or the tenant.
You may be exempt if the recommended works wouldn’t receive an energy efficiency payback within seven years, or if the property is registered on the Public Exemptions Register, perhaps because it’s listed or due for demolition (for example).
What to do
To find out more, please speak to Paul Ingram or another member of our Commercial Department on 01938 552545.